Millennials spend more on groceries than older generations
- A new report from Bankrate.com finds that millennials spend more on groceries than other generational groups, reports USA Today.
- On average, young adults report spending $797 per month on groceries, a higher amount than any other age group, according to the Bankrate.com study. Collectively between groceries, gas, restaurants and cellphone bills, consumers ages 18 to 36 spend $2,300 more per year than those 37 and older.
- A Bankrate.com analyst told USA Today that the reason millennials are spending more on groceries is because many older members of the group now have children, while the younger ones have fewer financial obligations and so are able to spend more.
Millennials are either already in or are rapidly moving into the family life stage. This is great news for grocers since it means more mouths to feed, both now and for years to come.
The front end of the millennial generation — those currently in their early-to-mid thirties — is firmly established career-wise and enjoys rising levels of disposable income to go with it. Many older millennials already have young families or are thinking about having children in the near future. More families translates to more grocery spending.
At the same time, younger millennials are graduating college, beginning their careers, and starting to think about marriage and families of their own — which again means more spending on groceries.
Aside from age and life stage issues, grocers must consider some key generational differences in shopping behavior. Unlike their older counterparts, millennials haven’t yet developed loyalty to any single store. Instead, they tend to shop around to meet all their grocery and household needs.
A recent study from Magid found that half of U.S. consumers aren't loyal to any single grocery store and are going many places to check off their shopping lists. This type of fragmented shopping means there’s room for many grocers and different types of retailers to win.
Experiential shopping and in-store product interaction tends to appeal to younger generations. Consequently, grocers that provide unique and fun experiences to draw shoppers and encourage them to spend — like adding restaurants, prepared meal solutions, meal kits, in-store bars and cooking/product demos — are well positioned to win over millennials.
But don’t forget that the millennial generation has grown up with online retailing — and Amazon. It will be interesting to see if millennials do more of their grocery shopping online just as they’ve done with other categories. Amazon is betting on it.
The e-tailer is taking several steps to enhance its positioning and disrupt the grocery space: Subscribe & Save services, Dash buttons and Dash Wand auto-replenishment, Prime Pantry, AmazonFresh, Amazon to Go, and the recent Whole Foods acquisition, among others. All initiatives aimed at winning a bigger share of stomach, not only with millennials, but across all generations.
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